AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2023 (3) TMI 760
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....unity of being heard to the Appellant. 1.2 It is submitted that in the facts and the circumstances of the case, and in law, the revision order is required to be held as bad and illegal as the same is passed in breach of the principles of natural justice, as well as with non-application of mind to the facts and the contentions brought on record by the Appellant. WITHOUT PREJUDICE TO THE ABOVE 2. REVISION ILLEGAL 2.1 The Ld. CIT erred in passing the order u/s. 263 of the Act, revising the assessment order passed by the A.O. u/s. 143(3) of the Act. 2.2 It is submitted that in the facts and the circumstances of the case, and in law, the order is bad, illegal and void, as necessary pre-conditions for initiating the revision proceeding as well as the completion thereof were not fulfilled. 2.3 Without prejudice to the generality of the above, the CIT failed to appreciate that: (i) The assessment order framed was not "erroneous" within the meaning of section 263 of the Act; and (ii) In any case, the assessment order was not "prejudicial to the interest of the revenue" within the meaning of section 263 of the Act. 2.4 It is submitted that in the facts and the circumstances....
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....ainst the intent of section 11(2) and 11(3)(c) of the Act. (b) In view of the above, the amount of Rs. 3,94,78,750/- received back from the advance paid out of the accumulation should have been considered as income of the assessee, but it was left to be assessed during the year under consideration i.e. A.Y. 2015-16. (c) In accordance with the provisions of clause (a) of sub-section 11(2) of the Act, assessee can accumulate such income which has been furnished as statement in prescribed manner to the Assessing officer, stating the purpose of accumulation and can be accumulated or set apart for not more than 5 years. As the assessee has re-accumulated the same amount after receiving back from the amount paid as advance, which has been given from accumulation of A.Y. 2005-06 and A.Y. 2007-08. The assessee has violated the provision of section 11(3)(c) of the Act in A.Y. 2015-16. The AO has passed order without the basic verification of the above facts stated above and therefore the order is prejudicial to the interest of revenue." 8. Accordingly, notice was issued to the assessee. In response to the notice, assessee submitted a reply that assessee has accumulated the surplus in a....
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..... 16-17. The return amounts were added as the part of the total income under the head income from property held under the Trust. From the total income including the above amount returned back, assessee applied for accumulation under Section 11(2) of the Act. He submitted that whether assessee is entitled to accumulate out of the above returned sum or not has been examined by the learned Assessing Officer during the course of assessment proceedings. He referred to letter dated 10th August, 2016, 21 November 2017 & 28 November 2017 stating that this issue was examined threadbare by the learned Assessing Officer, therefore, it cannot be stated that the order passed by the learned Assessing Officer is erroneous and prejudicial to the interest of the Revenue. 12. He further submitted that notice under Section 263 of the Act was issued on 9th March, 2021 to be attended to by 15 March 2021. He submitted that the notice was issued after more than 3 years from the date of the assessment order. He stated that in the notice explanation (2) of Section 263 of the Act was neither referred and nor invoked. For this, proposition he referred to the order of the Hon'ble Gujarat High Court in ca....
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....ustees, The B.N. Gamadia Parsi Hunnarshala vs. Assistant Director of Income Tax (12.04.2001 - ITAT Mumbai) MANU/IU/5003/2001 it was held that Deemed income is different from income contemplated under provision of statutes and therefore Assessee shall not entitle to claim benefit of accumulation out of such deemed income, "9. The matter may also be looked from another angle. The assessee would be allowed to accumulate income if there is real income. Something, which is not in the possession of the assessee, cannot be accumulated or utilized at a later date. Under Section 11(3) the sum which is applied to the purposes other than the charitable or religious purposes would also be treated as deemed income of the assessee though the accumulated income is not available with the assessee because it was applied for a different purpose. Reversing to Section 11(1)(a) and 11(2) of the Act, 25 per cent of the income can be accumulated or set apart for an application to some specified purposes in India, which means such amount should be available with the assessee for application. In the case of deemed income where the amount is already spent by an assessee (for the purposes other than charit....
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....the Hon'ble High Court, with due respect, has not analyzed this section in the correct perspective. In our humble opinion the different expressions i.e., 'income derived from property' and 'income', used by the legislation under Sections 11 and 12 of the Act missed the attention of their Lordships or the impact of the difference in the expressions were not brought to their Lordships notice. In fact, a different view was expressed by the Hon'ble Calcutta High Court in MANU/WB/0145/1991 : (1993) 199 ITR 215 (Cal) (supra) in a later decision. Under these circumstances, and in the light of the decision of the Hon'ble Bombay High Court in the case of CIT v. Thane Elec. Supply Co. MANU/MH/0282/1993 : (1994) 206 ITR 727 (Bom) at 738 we hold that the assessee is not entitled to the benefit of accumulation of deemed income which is taxable under Section 11(3) of the Act. 12. The assessee relied upon certain decisions in support of its contention that a legal fiction has to be carried to its logical conclusion. We fully agree with this proposition that a legal fiction no doubt has to be carried to its logical conclusion but at the same time, it cannot be stretch....
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....rejudicial to the interest of revenue. Hon Supreme court held that:- "2. At this stage we may clarify that under paragraph 10 of the judgment in the case of Malabar Industrial Co. Ltd. v. CIT MANU/SC/3008/2000 : (2000) 243 ITR 83 this Court has taken the view that the phrase "prejudicial to the interests of the revenue " under Section 263 has to be read in conjunction with the expression "erroneous" order passed by the assessing officer. Every loss of revenue as a consequence of an order of the assessing officer cannot be treated as prejudicial to the interests of the revenue. For example, when an Income Tax Officer adopted one of the courses permissible in law and it has resulted in loss of revenue; or where two views are possible and the Income Tax Officer has taken one view with which the Commissioner does not agree, it cannot be treated as an erroneous order prejudicial to the interests of the revenue, unless the view taken by the Income Tax Officer is unsustainable in law. According to the learned Additional Solicitor General, on an interpretation of the provision of Section 80HHC(3) as it then stood the view taken by the assessing officer was unsustainable in law and theref....